SCM 421 ACTUAL VERIFIED EXAM 2 QUESTIONS WITH 100% ACCURATE SOLUTIONS-
GRADED A+
Logistics do not equal ________
supply chain
What is procurement/purchasing?
procurement is the function and process of obtaining materials, products, and service for
the firm
Primary focus of procurement
support the operational requirements of the firm by ensuring uninterrupted flow of
appropriate-quality materials, products, and services; do so in the most effective and
efficient manager, in light of limited resources
The Seven Rights of Purchasing
- Obtaining the right material
- in the right quantity
- at the right time
- for delivery to the right place
- from the right supplier
- with the right service
- at the right price
,Supply Professional Requirements
Resources, Suppliers, Processes, Technologies
Resources
Need to know "everything" about what you are buying
Suppliers
Need to know who can meet your buying needs
Processes
Need to know the purchasing process inside and out
Technologies
Need to know how new technologies will influence both processes and products
Why is purchasing important?
purchasing provides value by buying stuff to go into production, overall goal is to provide
value to customers
, Profit Leverage Effect
amount of extra sales dollars needed to have the same impact of $1 saved by purchasing's
cost-cutting efforts
Profit Increase =
Net Sales x Profit Margin
Percent Increase in Sales =
New Sales / Original Sales
P-Cards
typically purchases < $2,000, savings of 55-90% of transaction costs
Leverage Produce Procurement
High Value Low Risk (many suppliers), procurement decisions often based on
consolidation, leverage is key, focus on who can provide the lowest cost, consolidate the
spend and purchases to get a discount
Supply Base Reduction/Rationalization
streamlining the supply base, combining requirements of different units, capitalize on
supplier fixed cost allocation and improved productivity
GRADED A+
Logistics do not equal ________
supply chain
What is procurement/purchasing?
procurement is the function and process of obtaining materials, products, and service for
the firm
Primary focus of procurement
support the operational requirements of the firm by ensuring uninterrupted flow of
appropriate-quality materials, products, and services; do so in the most effective and
efficient manager, in light of limited resources
The Seven Rights of Purchasing
- Obtaining the right material
- in the right quantity
- at the right time
- for delivery to the right place
- from the right supplier
- with the right service
- at the right price
,Supply Professional Requirements
Resources, Suppliers, Processes, Technologies
Resources
Need to know "everything" about what you are buying
Suppliers
Need to know who can meet your buying needs
Processes
Need to know the purchasing process inside and out
Technologies
Need to know how new technologies will influence both processes and products
Why is purchasing important?
purchasing provides value by buying stuff to go into production, overall goal is to provide
value to customers
, Profit Leverage Effect
amount of extra sales dollars needed to have the same impact of $1 saved by purchasing's
cost-cutting efforts
Profit Increase =
Net Sales x Profit Margin
Percent Increase in Sales =
New Sales / Original Sales
P-Cards
typically purchases < $2,000, savings of 55-90% of transaction costs
Leverage Produce Procurement
High Value Low Risk (many suppliers), procurement decisions often based on
consolidation, leverage is key, focus on who can provide the lowest cost, consolidate the
spend and purchases to get a discount
Supply Base Reduction/Rationalization
streamlining the supply base, combining requirements of different units, capitalize on
supplier fixed cost allocation and improved productivity
